Dutch companies to invest in Indian retail

Two Dutch companies are investing 450 million dollars (nearly Rs 3000 crores) in retail assets in India. APG Asset Management is a pension fund and Xander is an investment firm. The two firms have bought three shopping centers in the country. APG is investing 77 per cent of the funds, and Xander the rest. As per a Xander Group executive the transaction could be worth between Rs 2,000 crore and Rs 2,500 crore, making it one of the largest deals in the retail real estate segment in recent times.

In 2014, the two parties formed a venture aimed at investing in commercial office space in major Indian cities. The three shopping centers acquired by APG and Xander total about 3.5 million square feet and are in Bangalore, Chennai and Surat. The new developments will be in Mumbai, Delhi, Hyderabad and Pune.

APG’s interest in the retail real estate market comes at a time when other global investors, too, have ramped up their activity in the segment. Blackstone Group, one of the biggest owners of commercial properties in India, is now lapping up malls and has created a separate platform—Nexus Malls–to house these assets. A deal with Virtous Retail will mark APG’s debut in the retail real estate segment in India. Its real estate play so far has been limited to commercial and residential segments through joint investment platforms with local partners. In the commercial segment, it forged a joint investment platform worth 300 million dollars with Xander Group in 2014 to buy income-generating, institutional grade commercial assets across India's main office markets.

Retail rents in some malls have risen as much as 20 per cent over the past year, and shopping center yields in India are about 11 per cent compared with 4.9 per cent in Singapore and four per cent in London.